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1/ How do you calculate the present value of a future revenue stream ? How would you choose an appropriate discount rate ? 2/ Draw
1/ How do you calculate the present value of a future revenue stream ? How would you choose an appropriate discount rate ?
2/ Draw an appropriate graphic and briefly explain the Fisher separation theorem. What is "r" ?
3/ Briefly define the "certainty equivalent of risky decision and demonstrate using a graphic why a risk averse investor will prefer the certainty equivalent to the lottery itself.
4/ Briefly explain the critical difference (s) between the Markowitz mean-variance model and the Tobin-Sharpe CML.
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